Chapter 1 summary

Definitions:

Economics: The study of how to allocate scarce resources in the most efficient way.

Household: Group of people whose spending decisions are connected.

Economic problem: How to allocate scarce resources among alternative uses.

Model: A simplified view of reality that is used by economists as a means of explaining economic relationships.

Factor of production: The resource inputs that are available in an economy for the production of goods and services. Land, Capital, Labor and entrepreneurship.

Factor endowment: The stock of factors of production.

Production: The output of goods and services.

Goods : tangible products such as cars, food and washing machines.

Services: Intangible products, such as banking, beauty therapy and insurance.

Land: natural resources in an economy

Capital: man-made aids to production.

Entrepreneurship: Management.

Labour: The quantity and quality of human resources.

Opportunity cost : The cost of the next best alternative which is foregone when a choice is made.

Want: anything you would like, irrespective of whether you have the recourses to buy it.

Scarcity: A situation where there are insufficient resources to meet all wants.

Specialisation: The concentration by a worker or workers, firm region or whole economy on a narrow range of goods and services.

Exchange: The process by which goods and services are traded.

Subsidy: A payment by a governing body to encourage the production or consumption of a product.

Developed economy: an economy with a high level of income per head

Developing economy: an economy with a relatively low level of income per head.

Economic system: the way in which production is organised in a country or group of countries.

Economic growth: causes increase of productive capacity due to an increase of capital.

Production possibility curve:

The production possibility curve shows how resources are allocated. It shows the maximum quantities of different combinations of output of two products, given current resources and the state of technology.

that is a PPF:Economic market systems :

Market economy

Planned economy

Mixed economy

Homework for economic

Let's talk about the benefits and costs of the biggest ship around the world!

benefits

:It can bemake less pollution per unit carried tthan else, because the ship can carry much more containers. Also can decrease costs for teansport. . Also, it is more labour has job to dobecause the crew only consists of some crews. Fuel costs per unit carried are reduced because of the capacity of the ship.

Costs:

Building a biggest ship have to costs a lot also repair it.And size of ship is a big problem.If from China to UK,the ship will have to cross Suez-canal,it will be too small to cross for biggest ship.So the ship have to find another way on the west of the United States.

There are just two problems,in fact it has more than two problems on this.

And because of the size, the ship will very slow and time will be longer than normal ship.

Benefits for CHINA AND UK:

1)It can creat more jobs for people.

2)lower import prices will fall inflation.

3)The intellectual property rights will make a lot of money for the UK and China.

The original:Let's talk about the benefits and the cost of use the biggest ship to transport!benefits:I think there will be less pollution for unit carried, also massive the capacity, because they can transport a lot containers. Also it will reduce the price to consumer, because the cost of transport will decrease by the big ship. low labour cost as well, because there are only 13 crews which this case study mentioned. Also low fuel cost per container carried.costs:Build a biggest ship must cost a lot, also if a ship is very big, the speed will be reduce because when they want to pass some canal, for example Suez canal, they will use a lot of time. Also ore railway line needed. If they want to save money, the capacity of this ship must be full.Then, I would like talk about if UK trade with China.If UK trade with China, they can spend less money to import, also when they transport some products from China to UK, they can creates jobs for transport. Also it leading to lower cost push inflation, because the products from China is cheap which reduce the price of goods. However, trade with China might reduce the manufacture job in UK.

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